Premium pay on chopping block for three more holidays
Photo | Grant Welker
Worcester's Pleasant Street
Employees who worked New Year's Day will be the last to get paid time-and-a-half for their efforts on the holiday if Gov. Charlie Baker signs off on a piece of the $626 million economic development bill on his desk.
That bill would add the first of the year, as well as Columbus Day and Veterans Day, to the list of holidays for which premium pay will be phased out. The change is rooted in a deal struck by lawmakers in 2018 with retailers and small business groups that resulted in a ballot question that would have reduced the state's sales tax from 6.25 percent to 5 percent being withdrawn.
The addition of the three holidays to the gradual phase-out of premium pay on Sunday and holidays was tucked into the economic development bill passed by the Legislature in the early morning hours last Wednesday.
Baker is still reviewing the bill, and has the power to veto individual sections if he disapproves. But should he sign the holiday provision, those three days would join Memorial Day, Juneteenth, July 4 and Labor Day as holidays that employees by 2023 will no longer get paid extra to work.
In 2018, legislators and various interest groups pursuing ballot initiatives related to the sales tax, minimum wage and paid leave struck a so-called "grand bargain" to keep those questions from going before voters.
In exchange, the Legislature passed and Baker signed a law implementing a paid leave program and gradually increasing the minimum wage to $15 an hour. Retailers won a permanent annual sales tax holiday and the phasing out of the Blue Laws that required premium pay on Sundays and holidays.
Retailers Association of Massachusetts President Jon Hurst, however, has long said that in a drafting error the law did not reflect the full terms of the deal because it excluded New Year's Day, Columbus Day and Veterans Day.
The group allowed the bill to move forward and withdrew its ballot question based on assurances, Hurst says, that the language would get fixed at a later date. That date could be now.
"The Retailers Association of Massachusetts appreciates the work of the Legislative leadership to fix the Grand Bargain drafting error, and to follow through on the original deal," Hurst said.
"Particularly in these times of accelerating online sales due to the pandemic, we must make sure our local brick and mortar merchants are not put at a competitive disadvantage under antiquated, only in Massachusetts mandates, like the retail Blue Laws," he said.
Based on the "grand bargain" law, premium pay on holidays and Sundays dropped to 1.2 times a worker's hourly rate in 2021 and will decrease to 1.1 times the normal wage in 2022.
When the minimum wage hits $15 an hour on Jan. 1, 2023, workers will no longer be entitled to premium pay.
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